Trade deal may yield flood of Chinese tourists
NEW YORK (AP) -- Chinese citizens flush with cash from their booming economy will find it easier to vacation in the U.S. following a long-awaited agreement that the American travel industry hopes will bring in billions of dollars.
The deal, signed Tuesday by U.S. Commerce Secretary Carlos Gutierrez in Beijing, will allow Chinese travel agencies to market packaged leisure tours to American destinations, and it will permit U.S. destinations to advertise directly to the Chinese public.
With the number of Chinese who travel outside their homeland expected to nearly triple to 100 million people by 2020, an infusion of tourists to the U.S. could help American businesses.
"Potentially in the next 10 years, they could blow out all our other markets," said Bruce Bommarito, vice president of international market development for the Travel Industry Association, a U.S. business group.
Chinese travelers on average spend upward of $6,000 per visit to the U.S. -- more than residents of any other nation -- according to the Commerce Department's most recent calculations.
Bommarito and other industry players have lobbied heavily for Tuesday's accord, which they believe could open the floodgates for Chinese travelers, who often prefer to book the kind of group tours the agreement will facilitate.
While only 1 percent of Chinese who left the mainland last year headed to the U.S., a new study shows that many consider the U.S. their top vacation dream destination.
In an October survey of 7,000 urban Chinese who were asked what country they would choose to visit if they were unhampered by any practical considerations, the U.S. was the No. 1 choice, followed by France and Australia.
Participants in the survey, paid for in part by the American travel industry and by the Commerce Department, were contacted by random telephone dial and were not told that the survey was American-sponsored.
While any Chinese person able to obtain a U.S.-issued visa has for years been permitted to travel to America, perceived difficulties at U.S. consulates and misperceptions about visa rules have dissuaded many potential tourists, Bommarito said.
Without the "approved destination status" that Tuesday's agreement confers, U.S. tourist hot spots were unable to open tourism offices in China or advertise directly to the Chinese public. A few cities and states, including Nevada and New York City, negotiated individually with the Chinese government for permission to sidestep some of those restrictions.
Of course, Chinese residents will still need to obtain visas from the U.S. before they can visit, a process that many have found daunting. Consulates have dealt with concerns that some Chinese might not return home from their vacations.
But according to the State Department, the process has already been getting somewhat easier for prospective visitors. One in 5 mainland applicants for a business or tourist visa were denied their request in fiscal year 2007, down from 1 in 4 the previous year.
"China is so huge, and there are so many people traveling in such large numbers, and they like to travel in groups," said Deborah Harrison, senior vice president at Marriott International Inc. "They are also earning more money and they're able to spend it, and I think that destinations such as L.A. and New York and Washington and Las Vegas will really benefit."
Marriott International Inc. has already launched a Chinese-language Web site and has opened 30 hotels in China, partly in an effort to increase brand awareness among the Chinese.
The Commerce Department says it's too early to predict the economic impact of the agreement. In part, the results will depend on how quickly the private sector acts to take advantage of the agreement and on whether the U.S. is able to smoothly handle an increase in visa requests.
Even without the new agreement, the Commerce Department had already predicted that the 320,000 Chinese who came to the U.S. last year would grow to 579,000 by 2011 -- but travel industry observers say the number could rise far beyond that.
Still, there's plenty of work remaining.
"The tourism industry here is going to have to also get prepared for handling Chinese visitors, because they do not for the most part speak English," said Noel Irwin Hentschel, CEO of tour operator AmericanTours International.
China's inflation rate soars
BEIJING, China (AP) -- Chinese consumer prices in November jumped 6.9 percent from a year ago, the government said Tuesday, hitting their highest growth rate in more than a decade despite official efforts to rein in an overheating economy.
The National Bureau of Statistics said the overall increase in the consumer price index was fueled by rises in food and oil prices.
Food prices, which account for one-third of the index, were 18.2 percent higher in November than a year earlier, compared with an increase of 17.6 percent in October, the bureau said.
The overall November inflation rate was higher than the 6.5 percent increases reported for October and August -- then the highest rates in 11 years.
Inflation has surged in recent months due to double-digit surges in politically sensitive food prices blamed on shortages of pork and other basic goods.
The food price spike is especially sensitive for the communist government because China's poor majority spends as much as one-third of its income on food.
The consumer price index increase has reached 4.6 percent for the first 11 months of the year, the bureau said, overshooting the official target of 3 percent for the year.
Beijing froze prices of cooking oil and other basics in September and is pressing farmers to raise more pigs, promising free vaccinations and other aid. Economists say price pressure should ease when a new grain crop is harvested and more pigs come to market.
Farmers had been reluctant to raise more pigs in part because of an outbreak of blue ear disease, which killed 70,000 animals and prompted the government to destroy thousands more. The government declared in November it had brought the outbreak under control.
Regulators also raised state-set prices for diesel and gasoline by 10 percent on Nov. 1 in an effort to curb demand amid a fuel shortage. But the government said that should add only 0.05 percentage point to the monthly inflation rate.
The government has raised interest rates repeatedly this year to curb a boom in construction and investment that regulators worry could lead to financial problems. Economists say the recent inflation spike is due to food shortages and has nothing to do with those concerns.
First Ferris Wheel built on bridge
The Tianjin Eye, a gigantic ferris wheel constructed on Yongle Bridge over the Haihe River, will have its body completed on Tuesday morning, later allowing visitors a spectacular view of more than 120 meters above the ground.
Workers were still busy jointing and fixing the last sections of the rotary table on Monday. After the successful completion of the body, they will start to test the ferris wheel's loading ability by using sandbags, followed by the installation of capsules and the electronic drive.
The 110 meter diameter ferris wheel will lift people 120 meters up into the air, as high as one 35-storey building, and promise a grand view of around 40 square kilometers over the surrounding city.
It is reported to be the only ferris wheel in the world that's erected above a bridge.
There will be 48 capsules on the ferris wheel, each of them carrying up to 8 people at a time. It will take half an hour for this slow-rotating observation wheel to complete a full circle.
Credit data to go online
China is to establish a system to publicize the credit information of export businesses on the Internet so government bodies can better manage foreign trade.
The Ministry of Commerce yesterday said on its website that it will establish a foreign trade credit system in more than 10 provinces and municipalities including Beijing , Shanghai and Jiangsu . Through the system, the government will put the credit history and operational information of companies doing business overseas on the Internet.
Government supervision bodies and foreign companies will be able to retrieve the information through a website, the commerce ministry said on its website yesterday. This is part of the government's effort to build a system to make the credit information of all enterprises transparent.
The government first ran a trial credit system in Shenzhen three years ago. The city government has since put the information of nearly 10,000 enterprises on a website. Business partners can check the credit, tax and legal records of any of these companies online.
This is a good move for China's foreign trade, said Wang Shengli, a credit administrator under the Ministry of Commerce. "Chinese enterprises need good credit to win in global trade, and this is also good for their trade partners in other countries," Wang said.
Many Chinese companies do not fully understand the significance of credit and they do not pay enough attention to credit management within their companies, according to Han Jiaping, a credit management expert.
Paying more attention to credit will help Chinese enterprises' trade partners and is also good for domestic companies themselves because it helps them avoid risk, he said. But there is currently a lack of credit management personnel in China , Han said.
The credit system is part of the commerce ministry's effort to build a broader information system in the business field, Wang said.
The system will include information on companies doing business within China , as well as investment and other information. The Ministry of Commerce is to share with other government bodies, including Customs and tax, to supervise enterprises together. "This will make it more convenient for those who obey the regulation, while those who do not will get punishment," Wang said.
Vice-Minister of Commerce Gao Hucheng said earlier that through a ministry blacklist system the government has punished over 400 export enterprises that have broken rules or behaved illegally.
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